OPEC makes last-ditch bid to save oil deal as tensions grow
VIENNA: OPEC was trying on Monday to rescue a deal to limit oil output as tensions grew among the producer group and non-OPEC member Russia, with top exporter Saudi Arabia saying markets would rebalance even without an agreement.
OPEC experts started a meeting in Vienna at 0900 GMT and were due to make recommendations to their ministers on how exactly the Organization of the Petroleum Exporting Countries should reduce production when it meets on November 30.
Meanwhile, the Algerian and Venezuelan oil ministers were to travel to Moscow on Monday and Tuesday in a final attempt to persuade Russia to take part in cuts instead of merely freezing output, which has reached new highs in the past year.
In September, OPEC, which accounts for a third of global oil production, agreed to cap output at around 32.5-33.0 million barrels per day versus the current 33.64 million bpd to prop up oil prices, which have more than halved since mid-2014.
The meeting on November 30 was expected to rubber-stamp that deal, with Russia and some other non-OPEC producers such as Azerbaijan and Kazakhstan also contributing.
But doubts emerged in recent weeks as OPEC’s No.2 and 3 producers, Iraq and Iran, expressed reservations about the mechanics of output reductions and Saudi Arabia voiced concern about Russia’s willingness to cut.
On Friday, OPEC cancelled an experts meeting with non-OPEC producers scheduled for November 28 after Saudi Arabia said the organisation needed to sort out its differences first.
Over the weekend, Saudi Energy Minister Khalid al-Falih said oil markets would rebalance even without an output-limiting pact. That contrasted with his previous statements, in which he had said Riyadh was keen for a deal.
Doubts about OPEC’s ability to deliver promised cuts sent Brent crude down 2 per cent on Monday to less than $47 per barrel.
OPEC ministers started arriving in Vienna on Sunday for the group’s regular twice-yearly talks but Falih was not expected to land before Tuesday evening, leaving little time for traditional pre-meeting discussions with peers.
Iranian state news agency MEHR published an editorial on Sunday accusing Saudi Arabia of declaring a new “war on oil prices” and reneging on its promises to limit output.
The tone contrasted with Iranian news agencies’ more upbeat coverage of OPEC’s informal meeting in September in Algeria, when the initial deal was reached.